After House of Fraser had no choice but to appoint administrators, Mike Ashley’s Sports Direct has struck a deal to buy the company out of administration for £90 million, acquiring all of the UK House of Fraser stores, the brand and all of the stock in the business.
The Chinese owner of Hamleys, C.banner, was initially planning to invest £70 million in House of Fraser for a 51% stake but scrapped the move.
The deal has potentially secured the jobs of 17,000 staff which were endangered after the announcement that the company has fallen into administration and the planned closure of 31 of its 59 stores. The staff have been informed that they will be transferred over from House of Fraser to Sports Direct.
Prior to the collapse, Mike Ashley held an 11% stake in the department store chain. He said that “My ambition is to transform House of Fraser into the Harrods of the High Street”.
The leader of the Liberal Democrats, Sir Vince Cable, expressed that “this is yet another example of the crisis in our high streets” and has reiterated the call to scrap business rates to give high street retailers the chance to compete with online sellers. He advised that this is “a motion that will be put to the Liberal Democrat conference next month – and making sure big tech starts paying its fair share in taxation”.